Mountview Estates

02 September 2022
By Maynard Paton

Results summary for Mountview Estates (MTVW):

• A steady FY 2022 performance, buoyed by an H2 that saw property sales achieve a record £379k average and realise a 66% premium to their 2014 Allsop valuation. 

• The final dividend was lifted 11% while expenditure on new properties fell to a 13-year low after management expressed a desire to “not chase purchases at any price“.

• Net debt remains very modest at just 5% of the property estate and reflects management’s concerns of forthcoming “difficult economic circumstances“.

• Friction between major shareholders continues, with revised director-pay arrangements perhaps encouraging significant protest votes at the latest AGM.  

• Net asset value remains at £101 per share, although the balance sheet could be worth £210 per share assuming all owned properties enjoy immediate ‘reversionary’ gains and are then sold at fair-market value. I continue to hold.

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25 March 2022
By Maynard Paton

Results summary for Mountview Estates (MTVW):

• An acceptable H1 performance, albeit profit was suppressed by fewer property sales that in aggregate achieved a relatively low gross margin.

• Certain property disposals realising a record 65% premium to their 2014 valuation alongside an £11m special dividend do not suggest inherent trading difficulties.

• Management remarks of “difficult times that may lie ahead” may explain why expenditure on new properties remains low and net debt has been kept at just 4% of the property estate. 

• The special dividend, low expenditure and modest debt all perhaps signal a new ‘run off’ chapter, whereby the group consistently sells more properties than it buys.   

• Book value inched to a record £102 per share, although run-off guesstimates suggest total dividends following a complete estate disposal could total £264 per share. I continue to hold.

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15 July 2021
By Maynard Paton

Results summary for Mountview Estates (MTVW):

• A respectable performance supported by a remarkable H2 comeback, with full-year profit up 5% after declining 18% during a pandemic-disrupted H1.

• Property sales realising a welcome 1.55x premium to their 2014 valuation alongside the first dividend lift for three years suggest favourable near-term trading. 

• A small text change to AGM-related statements imply some unhappy shareholders have started to engage with management. 

• Debt of £22m stands at a 21-year low and represents just 5% of the £398m property estate.

• Book value inched to a record £101 per share, although my calculations still point to a balance sheet inherently worth beyond £200 per share. I continue to hold.

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04 December 2020
By Maynard Paton

Results summary for Mountview Estates (MTVW):

• A pandemic-affected H1 that showed revenue down 23% and profit down 18% following procedural delays to property sales.

• A maintained dividend, a lack for furloughed staff and rents up 1% did not signal inherent lockdown trouble. 

• Significant gross-margin enhancements may reflect an underlying step-change in performance and have favourable implications for valuation. 

• Expenditure on property purchases has picked up, with management hopeful of acquiring “exceptional opportunities”. Debt levels remain modest.

• Book value inched to a record £98 per share, although new profit assumptions now point to a balance sheet possibly worth up to £225 per share. I continue to hold.

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13 August 2020
By Maynard Paton

Results summary for Mountview Estates (MTVW):

• Standstill 2020 figures that showed 8% more properties sold at prices 9% lower than last year.

• A maintained dividend, a lack for furloughed staff and the directors currently being “happy in the auction room” underline some pandemic-resilient qualities. 

• Net debt representing a very modest 8% of the group’s property estate suggests significant scope to pick up any property bargains.

• This week’s AGM witnessed a further bout of protest votes against the independent non-executives, the board’s pay and the auditors.

• MTVW’s book value increased by 3% to a record £97 per share, although my calculations suggest the balance sheet could be worth £200-plus per share. I continue to hold.

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28 December 2019
By Maynard Paton

Results summary for Mountview Estates (MTVW):

• Brexit “uncertainties” led to a dull performance, with revenue falling 1%, underlying operating profit improving 1% and an unchanged dividend.

• An improved gross margin and the disposal of four investment properties for prices well above book were encouraging.

• Debt represents a modest 10% of the group’s property estate — which continues to be accounted for at cost.

• This year’s AGM witnessed further protest votes against the independent non-executives, the board’s pay and the auditors.

• MTVW’s book value increased by 4% to £96 per share, although the balance sheet could inherently be worth £200-plus per share. I continue to hold.

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15 July 2019
By Maynard Paton

Results summary for Mountview Estates (MTVW):

• Brexit “uncertainties” led to MTVW’s lowest annual revenue and earnings since 2013.

• At least the dividend was held and net asset value reached a fresh £94 per share high.

• A higher gross margin during the second half was encouraging and may indicate MTVW is enjoying slightly stronger sale prices.    

• Debt represents a low 12% of the group’s property estate — which continues to be accounted for at cost.

• My sums suggest MTVW’s balance sheet could actually be worth £200-plus per share — more than double the recent share price. I continue to hold.

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07 December 2018
By Maynard Paton

Update on Mountview Estates (MTVW).

Event: Interim results for the six months to 30 September 2018 published 22 November 2018.

Summary: The property-trading specialist revealed its weakest first-half performance since 2013 after selling eleven fewer houses than this time last year. Furthermore, the 133% investment return achieved from those disposals was below MTVW’s ten-year average. Nonetheless, net asset value (NAV) still managed to creep to a fresh £92 per share high. Meanwhile, dissident shareholders continue to vote against MTVW’s directors and may be growing in number. The £100 shares do not appear expensive on an NAV and yield basis, and I have recently bought more.

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19 June 2018
By Maynard Paton

Update on Mountview Estates (MTVW).

Event: Preliminary results for the twelve months to 31 March 2018 published 14 June 2018

Summary: This RNS was more interesting for the management comments — all 626 words — than the actual 2018 financials. Indeed, MTVW’s chief exec is probably the first-ever boss to tell shareholders their business has a “finite life” and had essentially operated in an ex-growth market for 30 years. Hardly inspirational stuff… until you realise the dividend was lifted 33% and has now grown 47-fold during the last three decades. Mind you, this property-trading specialist will at some point have to call it a day — and dissolve an estate that could be worth almost double the current share price. I continue to hold.   

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